8 March 2022
Premier African Minerals Limited
Zulu Lithium DFS Funding
Premier African Minerals Limited ("Premier" or the "Company"), is pleased to announce a conditional subscription for new ordinary shares by Suzhou TA&A Ultra Clean Technology Co., Ltd ("Suzhou TA&A") to raise £12 million before expenses at an issue price of 0.4 pence per new ordinary share for the ongoing DFS at Premier's Zulu Lithium and Tantalum Project ("Zulu") (the "Subscription").
Highlights:
| · | The Subscription fully funds the completion of DFS underway at Zulu. |
| · | Suzhou TA&A is listed on the Shenzhen Stock Exchange (SZSE: 300390) and has a market capitalisation of ¥42.9 Billion (£5.1billion). |
| · | The Subscription agreement affords Suzhou TA&A additional rights set out below, including a right to negotiate their future involvement and/or investment in support of the Company. |
| · | Premier anticipates active involvement and expertise from Suzhou TA&A in the development of the DFS. |
George Roach, CEO commented, "I am delighted to accept this Subscription from Suzhou TA&A, and particularly that this makes available to Premier a wealth of expertise in this industry whilst aligning future offtake and mine development with Yibin Tianyi Lithium Industry Co., Ltd., a major producer of Lithium Hydroxides, financier and take-off partner for the Manono Lithium and Tin project and who have completed long term spodumene off-take agreements with Pilbara Minerals Limited.
I look forward to welcoming a new board member who will be nominated by Suzhou TA&A and active involvement from Suzhou TA&A in our DFS, particularly in the area of test work and flow sheet development.
Developments within the lithium industry have been at so rapid a pace, that it is often difficult to ascertain and agree value. This Subscription that results in Suzhou TA&A holding an important stake in Premier, affords our shareholders (including Suzhou TA&A) with the opportunity to accelerate the DFS and at the same time negotiate an equitable path to future development. The Subscription also allows Premier to be in control of its own destiny and affords an opportunity to develop downstream beneficiation of spodumene through the retention of not less than 50 per cent of the off-take rights to production from a future mine."
Subscription Agreement
On 7 March 2022, Premier and Suzhou TA&A entered into a Subscription Agreement (together the "Parties"). Suzhou TA&A has conditionally agreed to subscribe £12 million before expenses for 3,000,000,000 new ordinary shares ("Subscription Shares") at an issue price of 0.4 pence within 15 business days following the entering into of the Subscription Agreement, to acquire a direct interest of 13.38 per cent in the enlarged issued share capital of Premier following completion of the Subscription.
The Parties have further agreed that Suzhou TA&A will, following the Subscription, be awarded the following:
| i. Exclusive offtake rights on commercial terms to the marketing and sale of 50 per cent of all spodumene produced at Zulu ("Offtake Rights"); |
| ii. An irrevocable right of first refusal for 180 days from the date of the Subscription to match any further equity or loan related funding that is contemplated by Premier, in particular any deal relating to Zulu, on terms no worse than those offered by another potential investor; |
| iii. A right of participation in any future funding so as to maintain Suzhou TA&A's shareholding of 13.38 per cent in Premier at all times; and |
| iv. A right to appoint one director to serve on the boards of Premier, Zulu Lithium Mauritius Limited, and Zulu Lithium (Private) Limited ("Board Appointment"). |
The Parties have agreed that should Suzhou TA&A elect to reduce its overall shareholding in Premier, then its Offtake Rights will be reduced in direct proportion to its remaining shareholding in Premier. Suzhou TA&A's Board Appointment will remain in place for as long as Suzhou TA&A holds 10 per cent. of the enlarged issued share capital of Premier.
Conditions Precedent
Completion of the Subscription is conditional on the following:
| i. Within 15 Business Days of the date of the Subscription, written confirmation that Suzhou TA&A has received all applicable outbound direct investment approvals and/or registrations from and/or with competent Chinese administrative authorities with respect to the Subscription ("Regulatory Approvals"); and |
| ii. Each of the standard warranties for a transaction of this type as set out in the Subscription agreement being true and accurate as at the payment date. |
In addition, Suzhou TA&A has agreed to make a non-refundable deposit of £1.2 million to Premier within 5 Business Days of the signing of the Subscription while the Regulatory Approvals are obtained ("Deposit"). The Deposit will be offset against the remaining proceeds of the Subscription following completion of the Conditions Precedent or retained by Premier in the event that the Regulatory Approvals are not received.
Premier has agreed to use the net proceeds of the Subscription, primarily, subject to the reasonable general working capital requirements of the Company, for the purposes of funding the lithium and tantalum exploration and exploitation activities of Zulu.
About Suzhou TA&A Ultra Clean Technology Co., LTD.
Suzhou TA&A is listed on the Shenzhen Stock Exchange under the ticker 300390 and holds considerable investments in the lithium sector. Suzhou TA&A is the largest investor (75 per cent holding) in lithium hydroxide producer Yibin Tianyi Lithium Industry Co., Ltd., together with China's largest EV battery manufacturer Contemporary Amperex Technology. Yibin Tianyi Lithium Industry Co., Ltd. objective is to become one of the largest lithium hydroxide producers in the world.
Director undertakings
George Roach and Neil Herbert, directors of the Company, have each undertaken pursuant to the Subscription Agreement, subject to their fiduciary duties and compliance with the AIM Rules and Suzhou TA&A being interested in more than 10 per cent. of Premier, to vote for the appointment of the candidate proposed by Suzhou TA&A as director under its Board Appointment rights. George Roach has additionally undertaken as a shareholder in Premier to vote for the appointment or nomination of the Suzhou TA&A proposed director as required.
Admission and Voting Rights
The Subscription has been arranged within the Company's existing share authorities and the Subscription Shares will, when issued, rank pari passu in all respects with the existing ordinary shares. Application will be made for the Subscription Shares be admitted to trading on AIM and admission is expected to take place on or around 29 March 2022.
Upon the issue of the Subscription Shares, the Company's issued share capital will consists of 22,418,009,831 Ordinary Shares, with voting rights. This figure may be used by shareholders in the Company as the denominator for the calculation by which they will determine if they are required to notify their interest in, or a change to their interest in, the share capital of the Company under the Financial Conduct Authority's Disclosure and Transparency Rules.
Market Abuse Regulation
The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 as it forms part of UK Domestic Law by virtue of the European Union (Withdrawal) Act 2018.
The person who arranged the release of this announcement on behalf of the Company was George Roach.
Forward Looking Statements
Certain statements in this announcement are or may be deemed to be forward looking statements. Forward looking statements are identified by their use of terms and phrases such as ''believe'' ''could'' "should" ''envisage'' ''estimate'' ''intend'' ''may'' ''plan'' ''will'' or the negative of those variations or comparable expressions including references to assumptions. These forward-looking statements are not based on historical facts but rather on the Directors' current expectations and assumptions regarding the Company's future growth results of operations performance future capital and other expenditures (including the amount. Nature and sources of funding thereof) competitive advantages business prospects and opportunities. Such forward looking statements reflect the Directors' current beliefs and assumptions and are based on information currently available to the Directors. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements including risks associated with vulnerability to general economic and business conditions competition environmental and other regulatory changes actions by governmental authorities the availability of capital markets reliance on key personnel uninsured and underinsured losses and other factors many of which are beyond the control of the Company. Although any forward-looking statements contained in this announcement are based upon what the Directors believe to be reasonable assumptions. The Company cannot assure investors that actual results will be consistent with such forward looking statements.
Enquiries
| George Roach | Premier African Minerals Limited | Tel: +27 (0) 100 201 281 |
| Michael Cornish / Roland Cornish | Beaumont Cornish Limited (Nominated Adviser) | Tel: +44 (0) 20 7628 3396 |
| John More/Toby Gibbs | Shore Capital Stockbrokers Limited | Tel: +44 (0) 20 7408 4090 |
| Matthew Bonner | EAS Advisors LLC | Tel: +1 646 495 2225 |
Glossary of Technical Terms
| "DFS" | Definitive Feasibility Study. |
Notes to Editors
Premier African Minerals Limited (AIM: PREM) is a multi-commodity mining and natural resource development company focused on Southern Africa with its RHA Tungsten and Zulu Lithium projects in Zimbabwe.
The Company has a diverse portfolio of projects, which include tungsten, rare earth elements, lithium and tantalum in Zimbabwe and lithium and gold in Mozambique, encompassing brownfield projects with near-term production potential to grass-roots exploration. The Company has accepted a share offer by Vortex Limited ("Vortex") for the exchange of Premier's entire 4.8 per cent interest in Circum Minerals Limited ("Circum"), the owners of the Danakil Potash Project in Ethiopia, for a 13.1 per cent interest in the enlarged share capital of Vortex. Vortex has an interest of 36.7 per cent in Circum.
In addition, the Company holds a 19 per cent interest in MN Holdings Limited, the operator of the Otjozondu Manganese Mining Project in Namibia.
Ends
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.
